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A Journal of Medical Defense

Workers Comp MGA and Dealing with Fraud

Most employers look to their agents to provide a better understanding of the benefits of workers’ compensation insurance. But even with all the benefits of a Workers Comp MGA program, there can still be drawbacks. One of the biggest concerns regarding the system is fraud.

If an employee is injured on the job, the insurance provides funds to pay for the medical bills along with a portion of the lost wages while the employee recovers from their injuries. The employee doesn’t have to fear losing his or her job after reporting a work-related injury, so there is less incentive for them to keep injuries quiet. But cases continually come to light where an employee makes a false or inaccurate claim as a way of trying to cheat the system.

Types of workers’ compensation fraud

Fraudulent activity can occur at every stage of a workers’ compensation claim, therefore employers must be vigilant to ensure the system is being properly implemented and carried out consistently, taking care to not reduce benefits for legitimate claims while working to reduce or eliminate fraudulent claims.

Some of the main ways fraud occurs during the workers’ compensation process includes:

The severity of an injury can be exaggerated: Even if the injury is real, someone may try to make it out to be worse than it actually is. For example, someone out on leave may claim they have not had proper time to heal, when in fact they are healthy enough to return to work.

A so-called “accident” can be intentional: Employees have been known to allow themselves to get hurt on purpose, which may often include injuries that are completely falsified.

Employees may claim workers’ compensation for injuries that happened in the past or may have an existing injury that they claim as being new or recent: Some potential red flags that may indicate this include no witnesses to the injury, injuries with medical details that don’t match up with the employee’s version of what caused the injury, or injuries that are reported that don’t appear to be new (for example, evidence of old scar tissue).

Agents, with the help of a Workers Comp MGA program, should help employers properly insure in order to aid them during legitimate claims while working to prevent false claims from occurring.